The Australian hotel industry’s revenue of $13.3 billion is set to rise by 2.2 per cent over the next five years. That’s good news, after the sector has taken time to rebound from the pandemic restrictions and saw revenue drop by 1.1 per cent from 2019 to 2024.
IBISWorld expects the overall industry revenue to rise to $14.9 billion by 2028-29.
Last year occupancy rates returned to pre-pandemic levels, IBISWorld reports, which led to an industry-wide recovery. Revenue per business dropped by 6 per cent to $16.5 million from 2019 to 2024 with a healthy 2.3 per cent rise in income predicted for the next five years.
The average stay, globally, is 1.93 days, and guests are on average booking about a month ahead – 29.7 days.
Hotels are set to enter a growth phase, and likely to respond to the increasingly popular luxury and ecotourism sectors. However, the mid-range segment will face stiffer competition and a higher wages bill.
Competition comes from Airbnb and similar agencies as property owners list accommodation for short stays. There’s also a trend to either lease premises or focus on managing hotel operations.
Traditional hotel-management agreements no longer meet the demands of the industry, suggests Australian-based hotel asset management and advisory firm Axsia HTL.
Gen Z and Millennials are now a big influence in the hotel industry, and they prioritise experience in their travel.
Tailoring customised experiences requires a flexibility that a franchise agreement can deliver, Axsia HTL boss David Simpson says.
He predicts a “robust year” ahead in Australian hospitality, with a rise in Revenue per Available Room (RevPAR) and room rates.
Brands in the business
According to IBISWorld, Accor Asia Pacific, which has 12 brands in its portfolio, accounts for the largest market share – 8.5 per cent.
Rydges‘ parent company, Event Hospitality and Entertainment, which includes non-hotel brands too, has a market share of 2.4 per cent.
The Marriot International Management Company (with six brands) has a 1.8 share.
Holiday Inn Holdings takes 1.3 per cent of the market across its eight hotel brands.
Hilton International, which operates Hilton and Doubletree, has a 1 per cent share.
Source: Hotels and Resorts in Australia, November 2023; Axsia HTL.